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U.S. Securities and Exchange Commission

Litigation Release No. 21803 / January 11, 2011

Securities and Exchange Commission v. ConnectAJet.com, Inc., et al., Case No. 3-09 CV-01742-B (N.D. Tex.)


The Securities and Exchange Commission announced today that on December 30, 2010, the United States District Court for the Northern District of Texas entered a Final Judgment against Stephen Fayette (Fayette), of Sarasota, Florida. The Commission's complaint alleged that Fayette was part of a scheme to pump and dump the stock of ConnectAJet.com, Inc. According to the complaint, ConnectAJet.com, Inc., of Austin, Texas, issued 30 million shares of stock in an illegal, unregistered offering to certain penny stock promoters. To pump up demand for the stock, ConnectAJet.com, Inc. and its chief executive, attorney Martin T. Cantu, launched a nationwide advertising campaign including false press releases. The complaint alleged that Fayette, a registered representative at Fagenson & Co., Inc. facilitated the scheme by liquidating ConnectAJet.com, Inc. shares on behalf of multiple customers, including the penny stock promoters. According to the complaint, Fayette ignored numerous red flags and failed to make a reasonable inquiry under the circumstances to ensure that his customers were not acting as underwriters.

The Final Judgment permanently enjoins Fayette from violating Sections 5(a) and (c) of the Securities Act of 1933 and requires him to pay disgorgement, prejudgment interest and civil penalties totaling $313,257. Fayette consented to the entry of the judgment, which also bars him from participating in any penny stock offerings. Fayette, who previously worked for registered broker dealers GLB Trading, Inc. and Franklin Ross, Inc., also consented to an order barring him from association with any broker or dealer.

Previously, the Court entered Final Judgments against Martin T. Cantu, his father Martin M. Cantu, one of the promoters, Verona Funds LLC, and relief defendant Edward Spahiu. Cantu and Martin M. Cantu were held jointly and severally liable for $632,327 in disgorgement. In addition, they were ordered to pay $260,000 and $130,000 respectively in civil penalties. The Commission's case against the remaining defendants is pending. The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) in this matter.

For additional information, see Litigation Release No. 21220 (September 23, 2009).



Modified: 01/11/2010